Italina investment bank Equita has held the first closing of its second private debt fund Equita Private Debt Fund II (EPD II), an Italian closed-end fund, PIR compliant and managed by Equita Capital SGR, at EUR100 million.First closers included a significant portion of existing Equita Private Debt Fund investors re-upping in the second fund – the largest being the Italian fund of funds Fondo Italiano d’Investimento – as well as new top-tier Italian and international investors, including the European Investment Fund.
Equita and the investment team remain significant investors in EPD II, confirming a strong alignment of interests with investors via an even larger commitment to EDP II than the predecessor fund.
The second phase of the EDP II fundraising process – which was launched in October 2019 with a target size of Euro 200 million (EUR250 million hard cap) – will be targeting Italian and international institutional investors interested in benefiting from the risk-return profile of this relatively new and growing asset class.
The Fund’s investment strategy will be in line with its predecessor Equita Private Debt Fund, investing in senior unitranche and subordinated bonds in sponsor-led transactions, with a maturity of five to seven years and a bullet repayment structure. The target returns are expected to be in line with those of the first private debt fund, which is now fully deployed with an expected gross return of around 9.5 per cent. EPD II will also benefit from strong governance, leveraging on an independent decision-making process and full alignment of interests between investors and the managing team.
The Fund’s deployment is expected to reach circa 26 per cent of target size shortly after First Closing. The team has been working intensively on sourcing and executing deals in recent months, thus confirming entrepreneurs’ strong appetite for alternative ways of financing, as well as the team’s ability to close transactions even in such a challenging market environment. In particular, EUR50 million total deployment is expected by the end of September 2020, on the back of two investments already completed thanks to a warehousing agreement – and expected to be transferred to the Fund in the next few weeks following the approval of internal governance bodies – and two additional investments that are expected to close by the end of the month.
Paolo Pendenza, Head of Private Debt at Equita Capital SGR, says: “Given the current market environment, we are really satisfied with the results we achieved. The positive track record of the first fund and the ability of the private debt team to identify new investment opportunities have allowed Equita Capital SGR to complete the First Closing of Equita Private Debt Fund II with EUR100 million, setting the stage to reach the final target of EUR200 million in the coming months.”
Andrea Vismara, Chief Executive Officer at Equita, says: “The First Closing of Equita Private Debt Fund II is another important step in the development of the Alternative Asset Management division and a key element of the Group’s strategic growth and diversification targets. As one of the pioneers of the asset class in Italy, we have been backed by many investors since the launching of the first private debt fund back in 2016. We are also pleased that blue chip investors like Fondo Italiano d’Investimento and the European Investment Fund have continually supported our project and investment team since the First Closing.”
